Mayor Kirk Caldwell signs vacation rental enforcement bill into law

At a ceremony in Honolulu Hale today, Mayor Kirk Caldwell signs Bill 89 (2018) into law, allowing up to about 1,700 permits for hosted bed-and-breakfast establishments starting in October 2020,

Honolulu Mayor Kirk Caldwell today signed into law a bill that gives the city stronger tools to regulate vacation rentals and increases the fines on operators found in violation.

Bill 89 (2018) also allows for the permitting of up to about 1,700 hosted bed-and-breakfast establishments (B&Bs) starting in October 2020, the first such permits to be made available in three decades. But the measure does not offer additional permits for the more prevalent — and more profitable — whole home transient vacation units (TVUs).

The Council passed the bill 9-0 on June 17.

The city stopped issuing new permits for vacation rentals in 1989. There are currently 816 legal ones outside of resort zones, where they are legal. The city Department of Planning and Permitting estimates there are 6,000 to 8,000 illegal vacation rentals on Oahu.

The measure requires operators to put the permit number or the address of the vacation unit on any ads, including those appearing on Airbnb, Expedia and other vacation rental hosting platforms. That makes it easier for DPP officials to go after illegal rentals by scouring websites instead of physically visiting the location to prove the operation is illegal. Fines would run as high as $10,000.

The new law is expected to be challenged by the vacation rental hosting platforms as well as groups of Oahu operators.

Supporters of vacation rentals say they reflect a growing trend of visitors who want an alternate experience from what’s offered by traditional hotels and resorts, and at the same time gives homeowners a chance to make a little money to help them get by. They warn the measure could result in the loss of thousands of jobs and negatively impact the visitor industry in general.

Opponents say the growing number of vacation rentals wreak havoc on residential neighborhoods and takes away from the inventory of available homes in the midst of a housing shortage. The influx of home-sharing also competes negatively with hotels and resorts, leaving their employees vulnerable to layoffs.

Caldwell today also vetoed Bill 85 (2018), a separate measure passed by the Council which would have only cracked down on the thousands of illegal vacation rentals and offered no path for them to become legal. City attorneys said language in that bill conflicted with what’s in Bill 89.

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